By default the SharePoint menu is two level deep: it contains a major and a minor level, look like this:
By the way: we can expand it! You need to open the master page, and edit the TopNavigationMenu property. The StaticDisplayLevels defines the number of the major levels, and the MaximumDynamicDisplayLevels defines the number of the deeper menu levels.
The default value of the StaticDisplayLevels is "2", because the first level is the Home page, and the second one is its first subsites. The MaximumDynamicDisplayLevels has default value "1" - this defines to display only one deeper menu level.
The following code example defines a menu with 3 deep levels:
StaticDisplayLevels="2"
MaximumDynamicDisplayLevels="3"
